Planning

Decomplexification

With more start headlines from Tesco this week, it would be easy to jump on the bandwagon and say ‘I told you all along. Those supermarkets are rubbish. They’re getting their comeuppance’. Of course, they’re neither rubbish, nor are they due a comeuppance. They have transformed most of our lives for the better. My mum and I were reminiscing recently and the topic of the food shopping came up: we had to drive 8 miles to go to a little shopping centre that simply wouldn’t pass muster today: a dour retail experience, not that cheap and certainly not that ‘super’. A few years’ later at University, studying in a biggish city down south, I encountered my first proper, out-of-town, Sainsbury’s. It was a revelation, staggering. And for fear that I paint a picture like it was Victorian times here; this was the late ‘80s. (1980’s, thank you, before you say)

But here’s another staggering fact. The average discounter stocks 3,000 product lines. The average supermarket? 40,000 to 55,000.

The rise of ‘every little helps’ – and by this I don’t just mean Tesco, but a grocery retail platform built on offering even more products, even more categories, from ever bigger stores, whilst beguiling at first, has brought with it the brand killer: complexity.

Killer? Too strong? No.

Consider product lines in a mid sized supermarket. 40,000 stock keeping units. Break this down: the supermarkets rarely stock a brand’s full range. They rarely stock the full availability of product formats, or packaging types. Consider: seasonal lines; limited edition runs; When It’s Gone It’s Gone lines. Consider: gondola end buy-ins, secondary siting units. Consider: in store activity; trial mechanics. Consider: the supply chain alone to get all these products, so that they are in store all the time to a perhaps over 2000 stores. Consider the impact of promotional pricing: the associated paperwork to get it set up on systems; the stock build up; the management of stock post event and the clearing up all the price mismatches months after.

No, there is little doubt, complexity is killing the retailers.

But, there’s also the change in shopping behaviour. My gran used to get my granddad to drive her, at least 4 times a week, often daily (Sunday’s excepted of course) into town. She’d work her way round the shops. Wakefield’s the butcher; eggs from the stall under the arches of the town hall; maybe some oatcakes from Browns inside the town hall; fish from ice-banked counter of the fishmongers which you could smell from the top of the street, Chatwins for a cream cake. And so it went on. How, years later, we would scoff at such antiquated and inefficient nonsense. Shop every day? Pah! Shop in more than one store? Madness!

The circle is coming round though. Inter-linking agendas, from supporting local, to food waste, to the pressure on time, to food trust, to the vanquishing of our high streets are seeing a return to some of the ‘old’ ways. Nowadays our family does a main shop with little top-ups or embellishments. Meat from the butchers, not the supermarket counter. Fish from the Monday van from Grimsby. The Co-op for fresh bread. Blimey, even the milkman has re-entered the mix.

It’s not just grocery: McDonalds’ are cutting back their range to ‘…let customers…quickly understand their order’ and because, ‘80% of our sales come from a small subset of the menu’.

And there’s the growth of the specialist, especially on-line. ASOS, Wiggle, Beer Hawk. If you want complexity, there has to be simplicity elsewhere. Want a crazy range of bike tyres? Go to Wiggle (or Chain Reaction) and get them. But want to buy books from there? Shop elsewhere young man.

The reality is that one major reason for the current stellar growth of Aldi, Lidl and even, say Poundland, is simplicity. Exploiting a niche and operating a simple business model. 3,000 lines. No up and down pricing. Less range. With a price that makes up for the (relative) lack of choice.

Whilst Tesco, Sainsbury and the likes are learning the lesson the hard way, the truth is, there’s a lesson in this for all brands. Simplicity and focus is the way to scale. Decomplexification we call around round here, in an ironically un-simple way.

David Preston is founder of The Crow Flies, a research, strategy and innovation company that helps brands find a direct route to long lasting success. david@thecrowflies.co.uk; +44 (0) 1889 725670; www.thecrowflies.co.uk; @crowflieshigh.

A Black Friday indeed

When you start your own business, one of the factors you underestimate is the time and organisation required to do the mundane tasks that the corporate world largely take away for you: for example, servicing the car or getting an MOT (if indeed, your company allows your car to get to three years old). So it was, that on this fine Friday morning, I found myself dropping off my car at a local garage before holing up in Costa Coffee in a Tesco for a good dose of (de)caffeine, free wifi – and the retail madness of “Black Friday”.

What does it say about our society and fundamental human behaviour that an imported, fabricated retail ‘event’ can cause (a) queues outside stores at 7am and (b) two men fighting outside a Tesco, of all places, to get the ‘bargains’ inside – as Mama Goat said, ‘I kid you not’? This is most definitely ‘a consumer response’ and as such I find myself quite intrigued by events like ‘Black Friday’ and similar ones like Halloween a few weeks earlier. As retailers have given Black Friday more focus in recent years, it has crept furtively, unwillingly, into my consciousness. Yet, whilst I know little of its origins other than the link to the day after Thanksgiving in America, this year, the tipping point was hit: adverts and break bumpers awash with retailer adverts announcing their fabulous offers. Even John Lewis getting in on the act – indeed, like our scrapping shoppers their website was punch-drunk and floored by the amount of traffic it received. Blimey.

But how successful are these fabricated ‘events’?

Let’s consider the shopper angle first. Witness this (slightly paraphrased but genuine) conversation I overheard in the café:

Woman 1, “I hate all this Black Friday nonsense. I mean it’s just an American thing. We’re just copying their culture”.
Woman 2: ‘But there are some real bargains to be had. Are you coming?”
Woman 1. “Oh yes!”

What seems to explain this is, more than anything else, is habit – habitual shopping behaviours and responses that we have learnt since our early years. In fact, despite one of the emergent societal hypotheses being that consumers in the developed markets are moving increasingly away from a consume more model to one of consume more responsibly, Black Friday shows that the ‘old’ paradigm isn’t dead. Far from it in fact: this habit of shopping, for bargains, is powerfully ingrained, visceral. It demands a response, a response which is embedded deep within our autopilot systems. These ladies chose to shop not out of desire so much, but habit – the opportunity, the slim chance of catching a snip of a deal – only with greater odds of winning than the lottery. What’s to lose?

Cute retailers are benefiting from these habits. The disciplined ones are adopting a ‘when it’s gone it’s gone’ approach: “Here’s some stuff. We’ve hacked the price. Get it before it’s gone”. Amazon advertising 80% cuts is a good example. Louis Vuitton, 60%. But many aren’t adopting this discipline. “Come into store for our Black Friday weekend event” (where you’ll enjoy savings of up to 15%) So that’ll be Black Long Weekend then? Doesn’t have quite the same sizzle to it, does it? And look at the January sales: they’ve moved to December – at first starting on the 27th, but now encroaching on Boxing Day – you know what’s next…

Event based marketing isn’t new but it’s gathering pace. A friend of mine, a Brit currently living in Canada, believes that Halloween could soon be a bigger shopping event than Christmas – a bold claim, but his logic is sound. It’s a unique event, it’s a relatively quiet ‘retail’ time of the year, it’s a real and traditional event that involves the whole family and indeed the community (if you count trick or treating your elderly neighbours and tipping over their plant pots if they don’t comply). Halloween I get. Easter too. Valentine’s (at a push). But at what point do we have so many events that they become meaningless. At what point do we Brits start celebrating Cinco de Mayo or Labor Day? At what point does the whole retail landscape changes to one of constant discounting, of ‘everyday low prices’ and an erosion of the few special events that make shopping interesting, fun? The lesson seems to be, if you’re going to benefit from events, ensure they’re real, have a connection with your audience and you have the discipline to know when to stop.

And it raises the question too: do events like Black Friday increase sales, or just alter their shape? Perhaps the food and drink industry needs to get behind these events in a more focused way as they are (more of) an expandable commodity: but TV sets? Tablets? DVDs? My hunch is the sales are pulled forward to move the pain elsewhere.

Anyway, I’d better finish there – the police want to interview me down the station. Apparently I landed a real beauty on his face.

Pathways and Holloways

There’s a pathway opposite my house that starts constrained on either side by two rather unruly hawthorn hedges and low cropped horse chestnut trees, before passing through a dilapidated five bar gate worn smooth by the daily administering of hands of walkers and horse riders over passing years. From there the pathway cuts across open fields for a good half mile towards a distant stand of trees along a low ridge. The field is quite open, no hedges, no obstructions. Yet the footpath meanders this way and that, suddenly curving through 45° and then heading back; at one point cutting up a half-bank when the natural lie of the land is straight on. The remarkable fact is that the walkers, me included, stick to the path. It is worn low, trampled and yellowed; either side, the spiky grass is tussocky and verdant.

At the top of the low ridge, the path heads through the trees, the presence of which confines it, narrows it. The energy of boot clad feet, dogs’ paws and horses’ hooves has turned the path into more of an old holloway, making the path cut down and deeper, the trees rising up high above, their roots exposed, holding back the banks. This path must have developed over hundreds of years; generations of feet tramping slowly exposing the bedrock. If you wished to deviate off this, it would be hard to do so.

Pathways and holloways are a good way of thinking about the impact of your brand building efforts. Brain ‘theory’ for want of a better expression, developing over the last 30 to 50 years, has added scientific uumph to the intuition many experienced marketeers have felt about the impact (or otherwise) of their brand activities on successfully changing consumer behaviour.

Our brains, metaphorically, are the landscape. Billions of neurons, connected to one another by synaptic nerves fire up and make connections as they receive ‘stimulus’; a process that starts from our first moments on the planet. The stimulus is everything we encounter – everything. So within this maelstrom of over communication the brand must cut through and compete. The good news is that in many respects brains are on our side. Over communication too, plays into the brand builder’s hands. Why? Because we need to make sense of things to run our lives. The brain does this by creating ‘pathways in the landscape’. Think about your journey to work; most of us have hundreds of possibilities: the mode of transport; the route; the time we are happy to dedicate to it; whether we need to stop for breakfast / snack en route; whether we need fuel… yet we tend to stick to the same route; because it’s easy and frankly, we’ve got enough other things to worry about. So our brains effectively create a pathway, which as we use it again and again, gets deeper and deeper, becomes engrained, becomes a holloway.

The holloway, from a brand perspective is the desired goal: just like my real life Holloway through the trees, deviation becomes difficult. In fact, research shows that once a deep path like this is created, the brain wants to use it. It was, if you like, the creator of the holloway and it wants to see it continue to thrive. A real life brand example: moons ago, I worked in beer competing with the mighty Stella Artois. Our brand was the first to launch a full scale branded glassware programme, the objective to heighten the drinking experience of the brand. Stella cottoned on quickly and responded with enormous scale; but it also responded with a glass, which at the time, we thought was horrendous. Made from jam jar glass, it was blow moulded and had indistinct, partially embossed branding. Shabby, we thought compared with our lovely screen printed vessel. But here’s the thing: Stella Artois had a holloway of purchase behaviour established. Their consumers didn’t see jam jar glass, they saw a thing of beauty. ‘Why! It must be incredible, it’s from Stella, and that’s my brand.’ If you want to break the habit created by the holloway, you need to do something pretty bold and stupendous (think Gerald Ratner describing his products as ‘crap’. That should do it).

Which is all very well, the question is how to create a pathway and a holloway in the mind of your consumer’s brain? The answer is both beguiling simple and deviously tricky: focus and sacrifice. You need to find your distinctive positioning and stick to it. You need to execute one, perhaps two, activities each year. You need to put your full weight against them. You need to repeat and repeat and repeat with unyielding consistency, patience and resistance to personal or corporate boredom.

Beguilingly simple; deviously tricky. But worth it to create those holloways in the brain.

For other blogs from David, please go to www.thecrowflies.co.uk/crowblog